24 slides from Northwestern Energy's shareholder meeting presentation, Aug 3, 2006
Slide 1: Annual Meeting of Stockholders August 2, 2006
Annual Meeting of Stockholders August 2, 2006
Slide 2: Forward-Looking Statement
2 Forward-Looking Statement During the course of this presentation today, we will be discussing certain subjects including those pertaining to our strategy, and our discussions may contain forward-looking information. Although our expectations and beliefs are based on reasonable assumptions, actual
Slide 3: Agenda
3 Agenda 1. Overview and Update 2. Financial Summary 3. Proposed Merger with BBI a) Description of Merger b) Approvals Required c) Timeline 4. Comments/Questions
Slide 4: Dependable. Reliable. Responsive.
DEPENDABLE. RELIABLE. RESPONSIVE.
Slide 5: NorthWestern Energy's Goals
Provide high quality reliable service Provide energy at reasonable prices Provide attractive return to our owners 5 NorthWestern Energy’s Goals We have streamlined our operations to better focus on our energy business
Slide 6: NorthWestern Energy Business Overview
Regulated Operations (85%*) Electric Operations (73%**) Gas Operations (27%**) 6 NorthWestern Energy 628,500 customers in Montana, South Dakota and Nebraska Montana 316,000 customers in 187 communities 7,000 miles of transmission lines 20,300 miles of distribution lines South Dakota 59,000 customers
Slide 7: Utility Service Territory
Utility Service Territory 7 NorthWestern Energy Electric transmission lines Natural gas distribution lines Supplier-owned electric or natural gas lines Electric generating plant Natural gas storage fields Natural gas compressor stations
Slide 8: Customer and Volume Statistics
Electric Customers (000) Electric Volume in MWh (000) Gas customer growth but offset by conservation and warm weather Electric customer and volume growth has been strong over the last 3 yrs 8 Source: Company reports and SEC filings. Customer and Volume Statistics Natural Gas Customers (000) Gas Volu
Slide 9: Highlights Since Last Stockholder Meeting: Operational Achievements
9 Highlights Since Last Stockholder Meeting Operational Achievements Procured electric supply contract for Montana 7 yr agreement at a substantial price discount to current market rates Comparing to estimated forward pricing curves, the contract starts about $22 below market rates and ends about $8
Slide 10: Highlights Since Last Stockholder Meeting: Customer Service Achievements
10 Highlights Since Last Stockholder Meeting Customer Service Achievements Received ServiceOne ™ Award for second consecutive year Conducted community weatherization events to prepare customers for higher winter gas prices Established the Challenge Grant of $1 million for customers
Slide 11: Highlights Since Last Stockholder Meeting: Financial Achievements
11 Highlights Since Last Stockholder Meeting Financial Achievements Completed divestiture of non-core assets Received $49 million from Netexit bankruptcy settlement Paid down $94 million of debt to achieve debt to cap ratio of just under 50% Debt Refinancings Amended the secured $250 million credit
Slide 12: Highlights Since Last Stockholder Meeting: Resolution of Significant Litigation
12 Highlights Since Last Stockholder Meeting Resolution of Significant Litigation All bankruptcy claims resolved except Magten matters Settled stockholder securities class action and derivative cases Received $9 million for settlement of NorthWestern v. PPL Montana breach of contract lawsuit and ban
Slide 13: Highlights Since Last Stockholder Meeting: Regulatory Achievements
13 Highlights Since Last Stockholder Meeting Regulatory Achievements Utility MPSC approval of the 2005 MT Electric and Natural Gas Default Supply Costs Trackers Completed review by the MPSC of the 2005 Electric and Natural Gas Default Supply Procurement Plans NWE/BBI Sales Transaction Filed applicat
Slide 14: Dependable. Reliable. Responsive.
DEPENDABLE. RELIABLE. RESPONSIVE,
Slide 15: Financial Highlights
EBITDA (1) Cash Flow from Operations (4) Capital Expenditures (2) 15 Source: Company reports and SEC filings. Note: Full year 2004 results show combined results for NWEC’s predecessor company from January 1, 2004 to October 31, 2004 and for NWEC from November 1, 2004 to December 31, 2004. (1) Before
Slide 16: Debt Ratings / Stronger Balance Sheet
Debt Ratings 16 Stronger Balance Sheet Debt to total capitalization ratio is down to 48.7% (from 50.2% at 12/31/05)
Slide 17: Proposed Transaction
Proposed Transaction
Slide 18: Proposed Transaction Summary
$37/share Cash to shareholders Buyer is Babcock & Brown Infrastructure * Enterprise value of $2.2 billion 18 Proposed Transaction Summary
Slide 19: Best Value and Risk Profile for NorthWestern Stockholders
Fairness opinions from widely recognized firms Credit Suisse and Blackstone Offer does not increase NWEC debt and includes adequate protection for stockholders All-cash price a 15.3% premium to our closing share price prior to announcing merger Best value for stockholders of proposals received durin
Slide 20: Who is Babcock and Brown Infrastructure?
20 Who is Babcock and Brown Infrastructure? Listing: ASX: BBI (on Australian Stock Exchange) Total Assets: $4,500 million 2005 Revenue: $745 million Headquarters: Sydney, New South Wales, Australia Website: www.bbinfrastructure.com BBI is a long-term, conservative, utility asset owner with a proven
Slide 21: Why BBI?
Access to Capital Stability Access to Expertise 21 Why BBI? In addition to providing the highest shareholder value, BBI is the type of owner who will support NorthWestern’s commitment to service excellence and community growth in the future.
Slide 22: Approvals Required
22 Approvals Required Stockholder approval Federal Energy Regulatory Commission (FERC) Montana Public Service Commission (MPSC) South Dakota Public Utilities Commission (SDPUC) Nebraska Public Service Commission (NPSC) Clearance under Hart-Scott- Rodino Act (HSR) Federal Communications Commission (F
Slide 23: Approval Steps for Regulatory Commissions
File regulatory applications Procedural Schedules and Data Exchange Hearings Regulatory approval 45 days 120 - 180 days 75 - 90 days Approval 240 - 315 days after announcement 23 Approval Steps for Regulatory Commissions The procedural schedules have suggested timelines to effect approval mid-2007
Slide 24: Comments/Questions
Comments/Questions